There's nothing illegal about being by far the largest e-book publisher. There is something illegal about conspiring with the majority of an industry to collude in price fixing. Also, I'm amazed at the gall of being upset that an illegal conspiracy against customers is actually leading to said customers being compensated.

I do not understand. Price fixing is saying, here is the price, no one go under this price. Apple said,here is what i am paying, if you let someone else get the book for less, then this is the new price I am paying.

Really? That is what apple said? The publishers were unhappy with Amazon discounting the books for a while but were unable to do anything individually. Apple came around and said we can work on this with you. The 5 publishers all got on-board and then gave amazon an ultimatum. change your model to agency or be excluded from the market.

Apple also said this:'We'll go to the agency model, where you set the price, and we get our 30 percent, and yes, the customer pays a little more, but that's what you want anyway.'"

See the part where Jobs acknowledged the customer (thats you and me) pays more?Is that how competition should work?

Actually apple came in and offered a way to break the amazon monopoly.

Apple Didn't offer DRM free ebooks at lower prices than Amazon...you know compete. Apple formed a price fixing cartel with publishers which is bad for consumers, and removing the ability to compete with Apple(Even if you are not buying Apple products)...the reason why Monopolises are bad.

Apple said,here is what i am paying, if you let someone else get the book for less, then this is the new price I am paying.

Not correct at all. The rules stated that if any other retailer sold the book for less than what Apple was, Apple could change their price and take it out of the publisher's percentage. Apple was all about protecting their 30% and not actually competing as a retailer.

Apple said,here is what i am paying, if you let someone else get the book for less, then this is the new price I am paying.

Not correct at all. The rules stated that if any other retailer sold the book for less than what Apple was, Apple could change their price and take it out of the publisher's percentage. Apple was all about protecting their 30% and not actually competing as a retailer.

That just means that Apple is guaranteed to get the same price as any other vendor. I'm still not seeing how this is price fixing, that is, keeping a price artificially low or high when you have total control of a product. There's gotta me more to it.

There's nothing illegal about being by far the largest e-book publisher.

I didn't say there was. Just that they have a monopoly in the ebook market, which is clear and true and definitely not illegal.

What should also be legal, is for publishers to say "you cannot sell my book for less than $X". Amazon can sell books for any price they like, down to $0, and the publisher cannot complain. Does that sound right to you? It means if a publisher irks Amazon, they can send book profits spiraling down.

Well, he has the advantage of the fact that five major publishers realized that this was blatant price fixing and settled out of court because they knew they had absolutely no case.

And the fact that Steve Jobs sent out an e-mail that was so damning of Apple's behavior that a representative of one of the publishers they were colluding with called the act of sending such an e-mail "stupid".

And the fact that the court already ruled pretty clearly that Apple is gu

They certainly have a cost per unit for Amazon. The money they have to pay the publisher. So what the fuck are your talking about? You seem to have not fully understood a term you read in some pro-piracy rant.

Simple selling below cost is NOT illegal, if you see cheap prices in the store, a lot of times they will below wholesale prices too. I remember buying a printer, at a Wholesale club, I saw the price, and emailed my nephew who sells computers, he said to buy the one from the store, since it was around 10% below the wholesale cost, and my nephew company get really good prices, since they sell a lot stuff. It's a way for the retailer to get into the Store, so they can sell higher margin items at t

simply being a monopoly is not illegal. if that were true then any business that doesn't have competitors for whatever reason is operating illegally. apple was convicted of price fixing, not being a monopoly. and you don't have to be a monopoly to coerce publishers.

That is because the "monopoly breaker" (Apple) broke the law by conspiring to set prices whereas what you determine to be a monopoly is not.
You are free to start up your own site and sell books. People might not buy from you but that's not because amazon has a side deal with the publishers (something Apple required with the MFN).

What should also be legal, is for publishers to say "you cannot sell my book for less than $X". Amazon can sell books for any price they like, down to $0, and the publisher cannot complain. Does that sound right to you? It means if a publisher irks Amazon, they can send book profits spiraling down.

It sounds right to me until you get to the 'profits spiraling down' part. Because Amazon pays the publisher the same amount no matter what the price. And yes, it does sound right to me because it's the wholesal

If I want to sell milk or gas at a loss to get you into my store, where I'll make a tidy profit off of other things, I can. Amazon is doing something akin to the last thing here. They had a small number of books acting as loss leaders.

No, that's not it. Amazon isn't doing loss leaders to make profits with other products now. They are making little profit on anything. Their business model is to undercut other businesses to put them out of business, such that they can raise prices in the future, when they have little competition.

It's a global version of what Walmart does town by town. Walmart opens in a town, and offers loss making prices till it bankrupts other businesses. Then when it has the town pretty much to itself, the prices rise.

AFAIK, Amazon made a profit on their ebooks market overall. There were certain titles they lost money on, but they usually weren't losing a great deal, and they made it up through their other titles. What you are talking about is dumping, and Amazon was not dumping. While I have many issues with Walmart, I don't think there's evidence of them dumping either. They do have prices that can drive away competitors, but it's done by a ruthless supply chain with ridiculous economy of scale, and cutting corners

It seems more like their intent is diversify in a number of markets that all seem to eventually become sustainable. That's a healthy way to run a business long term. I know it's bizarre to see such behavior, but that doesn't make them some unspeakable evil.

It seems more like their intent is diversify in a number of markets that all seem to eventually become sustainable.

It's not a question of making markets sustainable. Virtually all of Amazon's markets already are. It's a matter of driving other companies out of business to make monopolies. For example the time when it will be impossible for you to peruse a book locally before you buy it will very soon be here. Amazon is driving most physical book stores out of business. They are planning to do the same in other product areas too. And not just physical stores, but other web stores.

While they may be able to put the hurt long term on physical stores and permanently end them, they can't really keep websites at bay without keeping low margins. The barrier to entry is just too low. This is even more true for digital products like ebooks.

Amazon can sell books for any price they like, down to $0, and the publisher cannot complain. Does that sound right to you? It means if a publisher irks Amazon, they can send book profits spiraling down.

No they can't, not by setting the price to $0. Amazon pays the publisher the wholesale rate of the book, then charges the customer whatever Amazon thinks the customer will pay. If they set the price to $0, the publisher will get rich off of Amazon's losses. Of course, if they were pissed off enough they c

What should also be legal, is for publishers to say "you cannot sell my book for less than $X". Amazon can sell books for any price they like, down to $0, and the publisher cannot complain. Does that sound right to you? It means if a publisher irks Amazon, they can send book profits spiraling down.

No, it's fine. The publishers set a wholesale price they were happy with, and which they turned them a profit. Amazon paid it, then sold at a lower retail price than the publishers wanted. Ebook profits for publishers were never in jeopardy.

What should also be legal, is for publishers to say "you cannot sell my book for less than $X".

No, that is the very definition of price fixing and it is illegal because it violates the entire concept of the free market in which prices are set by the market. Companies have the freedom to sell to anyone they want at any price they want, but it is illegal for them to dictate what price the product is resold. That is precisely what Apple was colluding with the publishers to attempt to do and the court rightl

I'm going to try and make a nuanced argument here, so stick with me to the end before assuming that I'm dismissing something.

There's nothing illegal about being by far the largest e-book publisher.

There is when you're using your size in an anticompetitive manner, which Amazon was on the verge of doing.

They were leveraging their monopsony [wikipedia.org] on the wholesale side of the market to drive prices down. Their doing so was effectively a form of price fixing, since they essentially controlled the entire buyer's side of the market prior to Apple's arrival (and perhaps even since their arri

"There is when you're using your size in an anticompetitive manner, which Amazon was on the verge of doing."

So they weren't using it in an anti competitive manner, but you think they were on the verge of doing so?

1) You are not the arbiter of law. We have the justice system for that.2) You have to commit a crime first to be a criminal (or at least be accused of one and committed for it). When even you say "they haven't yet", then there's no crime.

Did you even read the link you referenced? The first line shows the problem with your claim of monopsony. 'One buyer faces many sellers.' You can't lump all of the publishers together and call them 'multiple sellers', because they all sell different products.

The second major problem with your claim is that Amazon is not the buyer, consumers are.

Amazon does not have some magical power to force publishers to accept low prices for ebooks. The publisher has a monopoly on his books, and he can set whatever p

You can't lump all of the publishers together and call them 'multiple sellers', because they all sell different products.

They all sell books. Sure, books are more differentiated than, say, strawberries, but the vast majority of them are not strongly differentiated and are fairly expendable. They're simply books. If there was only one chain of theaters in your nation, would you be making the same argument about the movie studios?

If Amazon doesn't get some ridiculously low price for an ebook, what are they going to do, not sell it?

Uh, yes, that's exactly what Amazon has done [theguardian.com] and continues to do [nytimes.com]. They pulled all Macmillan books in response to a pricing dispute they had with the publisher back before the switch to the agency model

Do you think they just love their customers or maybe if they can drive their competitors out of business they can raise prices later?

Amazon's actions are largely irrelevant because this is about Apple. The DoJ looked at Amazon and concluded their actions weren't illegal. Apple was simply uninterested in competing so they played ringleader in price fixing collusion to protect their profits and avoid having to compete - instead pushing off the costs of competition on the publishers.

Probably by their sub $100 eBook reader which fully supports open standards like EPUB. Among other devices I also own a Nook and its perfect for reading. Super light and it doesn't matter if its in full sun, its still usable. Battery live is also measured in days not hours...

Not saying its the "best" reader. I own a few kindle's as well and would say the Nooks sorting / book management is sub-par..

My response was to the "zune" comment. I suppose the logic is the nook is like the zune (a dead copy of an apple product).I dont find this true. I have a few nooks and a kindle which are perfect for reading on.

On a pure price/performance level the nook (reader, cant speak to the tablets) is a really good value.

Apple always seem to do so well in court. The timeframe has dropped to 10 years to five. The remedies to include "music, movies, television shows or other content," all gone. Apple having to allow Amazon, Barnes & Noble, and others to sell content through links to their own stores in their iOS apps, thereby avoiding Apple's 30 per cent tariff.

Apple is not going to be concerned about a few $. It is becoming increasingly necessary for content to move cross platform easily, without being treated as a criminal for removing trivial DRM, for all content and I include Applications. There is no technical reason for this today.

The payout is a separate thing that's a result of the settlements the DoJ struck with the publishers last year. It's part of the same issue, but it was settled out of court and wasn't part of this case.

For this ruling, the judge is barring Apple from engaging in "most favored nation" clauses (i.e. "our store will always have the lowest price for your product, or will be tied for having the lowest price") and is forcing them to stagger re-negotiations with the various publishers over the next few years in order to ensure that no collusion occurs. As I understand it, and I may be mistaken, they are not barred from engaging in agency model deals (i.e. "you get to set the price and we'll take X% cut"), which was actually a large part of what led to the price increase in the first place. Prior to that, the industry standard was the wholesale model (i.e. "we negotiate a price that you sell the book to us for, but then we can sell it to consumers for whatever")

Personally, I think the lawsuit was rather ridiculous, since Amazon was poised to destroy the entire industry, and the shift to the agency model was a necessary one to ensure the long-term health of the industry. Prior to Apple showing up with iBooks, Amazon was in a position to leverage its monopsony on the eBook market (like a monopoly, except it's when someone commands the buying side of the market, rather than the selling side) to force the publishers' hands and demand lower and lower wholesale prices. The publishers recognized the threat that posed them, so they worked out an agency deal instead, which led to lower short-term profits (despite the increased cost to consumers, simply because the agency model took a bigger cut than the wholesale model was at the time), but provided them with long-term control over their own prices.

Effectively, they took away Amazon's ability to do what was best for itself at the expense of the industry as a whole. After all, Amazon wins by lowering prices regardless of what happens to the publishers: by forcing them out it becomes the de facto publisher for virtually all eBooks thanks to its self-publishing tools, and by lowering their prices to unsustainable levels it pleases consumers and locks some of them into its ecosystem through the proprietary.azw and.kf8 eBook formats. Had the publishers been colluding to increase profits by gouging customers, I'd definitely be in support knocking them around for antitrust stuff, but the fact that they were making less money per unit sold under the agency model tells me that this was a long-term play to stay alive, rather than a short-term one to turn a quick buck at the expense of the consumer, and as such, the DoJ should have left it alone, even if it did increase the cost to consumers.

(Admitted lack of citation: I did read in multiple places over the last few months that profits were down under the agency model, but I'm knocking this comment out quickly, so I don't have time to look them up. Sorry. Doubters and welcome to doubt.)

Personally, I think the lawsuit was rather ridiculous, since Amazon was poised to destroy the entire industry,

Ignoring your waffle. By Industry you mean "bleeding customers" by Middle Men who are desperate to remain relevant post paper. Raising ebooks prices has been *damaging* to the ebook industry. Hopefully these parasites will become obsolete one day, how they treat authors is appalling. hopefully we will see a rise in self publishing.

I'm actually with you on hoping for a rise in self-publishing, though not as it is now, nor am I rooting for the demise of the publishers, since I think they serve a valuable function in the market.

Publishers, despite their name, actually do quite a bit more than publishing. Really, their worth today is in their editing and marketing, and both of those are EXTREMELY important in the self-publishing market, where most of the stuff that's there simply isn't worth our time, making it hard for anything that's g

As for Amazon, my complaint was more that Amazon was on the verge of engaging in anticompetitive practices by leveraging their monopsony in the wholesale market to destroy the publishers, which would, in turn, boost their own self-published eBooks business.

You mean, Amazon was guilty of precrime? It wasn't what they had done, it was what you feared they might do.

As for Amazon, my complaint was more that Amazon was on the verge of engaging in anticompetitive practices by leveraging their monopsony in the wholesale market to destroy the publishers, which would, in turn, boost their own self-published eBooks business.

You mean, Amazon was guilty of precrime? It wasn't what they had done, it was what you feared they might do.

Pretty much.

Granted the way you put it makesw\ it seem silly. But I simply haven't thought of another reason for Wall Street to shower cash on a company that is basically breaking even (their Q1 profit margin was 0.5%) on the basis that "aggressive sales growth in new markets is expensive" unless Wall Street is convinced that as soon as Amazon hits a certain point in said markets it will jack up prices. Since they do not create new markets they are taking sales from somebody, which means they are driving th

Since they do not create new markets they are taking sales from somebody, which means they are driving their competition out of business.

Well, yes. Every business ever does that, or dies. There is a finite amount of money. If your cash flow is increasing, there's money being spent on your products/services that isn't being spent on other companies. This hold true even if they are create new markets. There's always something that money isn't buying.

Which would be highly illegal, and very difficult to un-do. I don't know that Bezos is actually gonna do anything quite this unethical/illegal, but I'm not entirely comfortable just trusting him to not be evil.

Which puts you in a bit of a bind, cause that's pretty much the basis of society. I don't know my neighbour's not going to burn my house down when I'm a way; I don't know that the guy down the road

I think you're over-simplifying business a lot when you claim "every business ever" sucks money from other businesses. Economic growth is a thing that exists. Apple really takes advantage of this by putting together new ideas (granted, frequently those ideas don't originate in Cupertino) into new products and creating sectors. They frequently end up putting people out of business, but generally the people who get put out-of-business aren't their direct competitors. They're either in completely different sec

The problem is that self-publishing only solves one of the problems that traditional publishers have historically addressed.

Editing and Triage are other major issues, and the traditional publishing industry seems to be helping to close the gap by skimping on both....

I don't see why those can't be solved without traditional publishers, but there's probably always going to be a need for someone to edit, and for someone to front the money for that to happen (and, choose what gets edited and what gets ignored,

Personally, I think the lawsuit was rather ridiculous, since Amazon was poised to destroy the entire industry, and the shift to the agency model was a necessary one to ensure the long-term health of the industry.

The lawsuit was nothing to do with Amazon. It was to do with Apples actions and those of the big publishers.

I'm aware of that. What I was intending to convey was that they were responding to an anticompetitive threat posed by Amazon's monopsony, and as such, it's strange that they're being punished for taking necessary steps to protect their businesses against that threat.

As I've clarified elsewhere, I do believe that they engaged in price fixing, but that came in the form of the most-favored nation (MFN) clause that Apple had in its contracts. The switch to the agency model, which is what was largely responsible

I'm aware of that. What I was intending to convey was that they were responding to an anticompetitive threat posed by Amazon's monopsony, and as such, it's strange that they're being punished for taking necessary steps to protect their businesses against that threat.

Hmm...apparently you either skipped over or didn't understand the relevance of what I said after the part you quoted. Let's see if a car analogy helps, since I actually think the fault is mine for not communicating well enough.

If you flew on an airplane and then later that day got a speeding ticket while driving home from the airport, you'd be shocked if you saw that the speeding ticket claimed you were traveling at (car's speed + plane's speed), and that you were being punished accordingly, right? Clearly

IANAL either, but they're not being penalized for doing a bunch of legal activities, they're being penalized for the collusion. The penalty is a limitation in their ability to make contracts using the legal activities they used during the collusion so that it will be harder for them to collude again in the near future. This includes forcing Apple to stagger their contracts with the publishers.

No clue why you put scare quotes around "monopsony" when it's a real word that's in common use. Feel free to look it up in a dictionary. It's the on the other side of the coin from a monopoly (which is what happens when there's only one seller in a market, and with which we're all much more familiar)

Anyway, in response to your question: I have no clue. From what I understand of the situation, the DoJ targeted Apple and the publishers in response to complaints over rising prices. By no means am I suggested t

And I've already addressed your other (quite valid) points in other comments. To summarize, however, B&N was a bit player at the time with less than 10% market share compared to Amazon's 90%, so unless the publishers were willing to tank their own sales, they had no options until Apple came along, and the MFN clause was certainly illegal, since it was a form of price fixing.

Beyond that, I don't really have much to add, since I agree with most of what you said.

Okay, so, I actually already disagree with some of what I said here, such as my assertion that "the lawsuit was rather ridiculous".

I revised some of my opinions [slashdot.org] elsewhere in these comments. At this point, I take issue, not so much with the lawsuit itself, but more with the size of the damages being pursued, which I feel are not in alignment with the actual damage caused by the anticompetitive behavior in which Apple and the publishers engaged (and which I do agree occurred). Put differently, I think they're

I've bought a lot of ebooks (well over a thousand), and most of them I bought on sale before agency pricing model took effect or after the settlements. I never bought any ebooks from Amazon before agency pricing model, and I calculated that I would have had to pay triple, at least $3,000 more, after agency pricing model took effect over what I paid. With that sort of price increase, I don't think they're being unfairly punished.

While Amazon's monopsony might make it harder for publishers to raise prices

Effectively, they took away Amazon's ability to do what was best for itself at the expense of the industry as a whole. After all, Amazon wins by lowering prices regardless of what happens to the publishers

I am not sure that is the way it works. The publishers can make any sort of deal with Amazon that the publishers want. The publishers could tell Amazon, and anybody else, this book has to sell for at least $X. If Amazon did not agree, then Amazon could not sell the book, and publishers would sell the ebook

Saying "this book has to sell for at least $X" is actually considered a form of price fixing when you're working with a wholesale model. That's why the "S" in "MSRP" stands for "suggested", rather than being an "R" for "required". In fact, Apple has run into that issue with their electronics, since premium pricing is part of their brand image, yet it's difficult to enforce it without running afoul of antitrust legislation.

And regarding my assertion, I think there may be a misunderstanding, since some of wha

"Personally, I think the lawsuit was rather ridiculous blah blah blah"

So to cut a long story short, what you're saying is that you don't like healthy markets where prices are reduced for consumers naturally due to competition and where companies that refuse to be competitive risk being put out of business and you instead prefer to see price-fixing scenarios where consumers are screwed due to industry collusion preventing competition amongst publishers to naturally bring prices down?

I've already retracted that particular statement, actually. Please see my response to myself in another comment. I agree that price fixing occurred and that it needs to be punished accordingly. Where I disagree is in the accounting, which seems to largely be punishing them for perfectly legal activities (e.g. the agency model and the corresponding price increase that resulted from switching to it).

But to answer your question, I'm fine with competition. My issue here was that there was no competition since t

A fair point, and one I actually agree with. I did conflate the two in my comment. I'm certainly not above admitting that.

I do agree that authors deserve to be better compensated, but at the same time, while I do think that publishers take more than their fair share, I also think that they do provide quite a bit of benefit to the industry, since they serve to ferret out the diamonds in the rough. As others have mentioned, buying self-published books is largely an exercise in futility, since it's hard to fin

while I do think that publishers take more than their fair share, I also think that they do provide quite a bit of benefit to the industry, since they serve to ferret out the diamonds in the rough

You keep saying this, but I would say about half of the ' properly published' books I have bought over the years have been junk. And this is in the field of factual books ( I don't bother with fiction ). That's no better than my record on buying self-published books.

And it's actually self-published books, or those from tiny speciality publishers, which are considered by the market to be most valuable years after publication.

Mainstream published books? Just rehashes of what someone else wrote and once th

The price advantage limited run books have is more supply-and-demand then a judgement on the quality of the books. The Complete Works of Shakespeare has been been published thousands of times, so there are probably hundreds of millions of copies floating around, which means it's fairly easy to find one. A first-run copy of an obscure title from a specialty publisher in a niche field probably only had a couple thousand copies printed, many of which are off the market (they're hiding in an attic, library, des

I never suggested Apple did it for altruistic reasons, I never said they are being destroyed (I said that Amazon was poised to do so, but I never said that it actually had, nor would I say that), I agree fully that the agency model is more expensive for them because of the retailer's cut being larger, and them coming back to Amazon to negotiate agency deals was not the problem (the problem was the MFN clause in their contract with Apple).

None of that changes what I said, though please see my partial retract

Keep in mind that the fines penalty phase of the trial hasn't happened yet. According to a commentator on Ars technica's thread the footnotes of the decision indicate the financial penalty phase will be in May. As for Apple currently doing this with other content, it's unlikely it would work with other content because other content-producers aren't going to agree to increase retail profit margins at their own expense to screw some third party. It's not like the movie studios are paranoid that Netflix will

As for "carefully organized screwing over of consumers," that's what the DoJ thought it convicted Apple of. But the Judge seems to be more convinced Apple carefully organized a screwing of Amazon, which had the extremely illegal side-effect of screwing consumers. And if that's the case the way you prevent future occurrences isn't by gutting Apple, it's by ensuring there's a guy at the Board Meeting who can say "Morons, if you do this business move it will screw consumers and I will tell the Judge to fine you $8 Billion."

It's a very fine line, but I think you (and the judge) are probably on to something there.That having been said, they knew what they were doing.

BTW, I sincerely doubt Apple's fine will be as high as you'd like.

I don't particularly want to see apple fined at all.They obviously make very good products that people like. Because of this, they don't need to screw consumers, but they did it anyway. I think they should be prevented from doing so again. Personally, I'd rather see them forced to allow people to be able to buy ebooks through the kindle or nook app than forcing them

I am not sure they do, but the image of technical mind hippy revolutionary is long gone and replaced by a mega corporation prepared to lie, pay no tax towards hospitals and schools, steal money from consumers, proud of manufacture goods in china (including new reports this week...again) by badly treated by China's own standards workers, produce damaging to the environment products, and is incredibly litigious, on the backs of heavily marked up mid range products. if popular opinion is going against them may

That was also back when their evil behaviour didn't affect many, as opposed to now, where mobile apps are generally still created for their walled garden before more open platform even though it has a falling market share. That was back when they were considered the 'underdog'. They still make nice hardware... I would have bought an MPB for my last computer if they behaved better.

mobile apps are generally still created for their walled garden before more open platform even though it has a falling market share

Android has a larger market for Applications with Apple having only 900,000 Apps http://en.wikipedia.org/wiki/IOS_App_Store [wikipedia.org] vs Androids Play store http://en.wikipedia.org/wiki/Google_Play [wikipedia.org] 1+ million apps and the gap is going to get wider. The iphone is none existent in some markets, so no developers in those markets create iphone apps. The iphone also uses legacy hardware, and no gaming platform where android has many consoles, and cutting edge devices. The days of iOS exclusive or even first is long gone.

I don't want to start a holy war here, but what is the deal with you Mac fanatics? I've been sitting here at my freelance gig in front of a Mac (a 8600/300 w/64 Megs of RAM) for about 20 minutes now while it attempts to copy a 17 Meg file from one folder on the hard drive to another folder. 20 minutes. At home, on my Pentium Pro 200 running NT 4, which by all standards should be a lot slower than this Mac, the same operation would take about 2 minutes. If that.

For the record, the Mac model he's claiming to use is 16. It is incapable of running any version of OS X. Which means he's running Mac OS Classic, probably some version of Mac OS 8 or System 7, but possibly as new as OS 9. In any of those cases his version of of the OS has a shitty version of multitasking which isn't preemptive multitasking, largely because Mac System 1 had to fit a full GUI and all it's bell and whistles into 128kb of RAM and when you do that you don't get many bells and whistles like pree